The Commercialization of Technology

1. The Commercialization of Technology • Dr. Michael Stankosky

2. OVERVIEW ENTREPRENEURSHIP ENVIRONMENTAL ASSESSMENT GLOBAL OPPORTUNITIES FOR ENTREPRENEURS INNOVATION ECO-SYSTEM QUESTIONS Peace and Prosperity Through Science and Collaboration www.crdf.org 2

3. ENTREPRENEURSHIP Peace and Prosperity Through Science and Collaboration www.crdf.org 3

4. Good work, but I think we might need just a little more detail right here. Yet so far! Peace and Prosperity Through Science and Collaboration www.crdf.org 4

5. Entrepreneurship: An Evolving Concept “entre prendre” - meaning “to undertake” The Entrepreneur: Characteristics Personal initiative Ability to consolidate resources Management skills Tendency towards autonomy Risk taker Competitive Goal-oriented Aggressive Ability to employ HR Definition and History No specific definition History dates back to the 1700s in France Linked to free enterprise and capitalism Peace and Prosperity Through Science and Collaboration www.crdf.org 5

6. The Entrepreneurial Revolution Entrepreneurs: Challenging the unknown Recognize opportunities Athletes, Top Gun Pilots, Symphony Conductors Entrepreneurship: A Perspective Dynamic perspective More than just starting a business Attitudes An Entrepreneurial Economy Predominance of small firms and new ventures 10 years - 600,000 new businesses incorporated 90% of the business population Provides “net” new jobs Key to the US success economically Peace and Prosperity Through Science and Collaboration www.crdf.org 6

7. Understanding the Entrepreneurial Perspective in Individuals “We need a person, in whose mind all of the possibilities come together, who believes innovation is possible, and who has the motivation to persist until the job is done.” Entrepreneurs as the cornerstone of the American enterprise system - Frank Carey of Pizza Hut Driven by commitment Determined perseverance Work very hard Optimist Strive for integrity Competitive desire to excel Failure is tool for learning Confidence in themselves Peace and Prosperity Through Science and Collaboration www.crdf.org 7

8. Major Themes that Characterize Entrepreneurship Entrepreneurial and managerial domains overlap to a high degree Venture financing has emerged since 1980 Entrepreneurship within large enterprises has gained much attention There are key entry patterns and strategies to successful business start-ups Great variety of methods to start a new business Women and minority entrepreneurs have emerged in unprecedented numbers Worldwide entrepreneur growth Slow economic and social contributions Entrepreneurship education is in high demand Peace and Prosperity Through Science and Collaboration www.crdf.org 8

9. ENVIRONMENTAL ASSESSMENT Market Assessment/ Evaluation of Entrepreneurial Opportunities Peace and Prosperity Through Science and Collaboration www.crdf.org 9

10. Commercialization and Marketing Strategy A Framework for Marketing Management Corporate Missions and Objectives Assessment of Market Opportunities Market Segments Targeted Marketing Objectives Strategy Development Marketing Mix Formulated Marketing Program Established Tracking System Evaluation and Control Peace and Prosperity Through Science and Collaboration www.crdf.org 10

11. Environmental Assessment: Preparation for a New Venture “Coping with the constantly changing environment is probably the most important determinant of a company’s success or failure in a free enterprise system.” Alan J. Rowe Environmental Scanning Efforts of the entrepreneur for examining the external and internal environments before making a decision External Environment - opportunities and threats outside the organization Internal Environment - structure, culture, resources Task Environment Peace and Prosperity Through Science and Collaboration www.crdf.org 11

12. Macro View Assessing the Economic Environment Questions to answer to avoid pitfalls Examples? Attitudes and skills needed for a proper assessment Examples? Understanding the regulatory environment A business must comply with governmental rules and regulations Government effect on small business Tends in policy formation i.e., Small Business Regulatory Enforcement Fairness Act Peace and Prosperity Through Science and Collaboration www.crdf.org 12

13. Marketing Research for New Ventures Marketing Research What is it? Specific Objectives of Marketing Research Six objectives Secondary Data Information already compiled - Inexpensive - Sources? Primary Data New information accumulated through observation and questioning Surveys - Day to day data accumulation Interpreting and Reporting the Information Summaries, tables, charts EIS? - KM system? Peace and Prosperity Through Science and Collaboration www.crdf.org 13

14. Marketing Stages for Growing Ventures Entrepreneurial Marketing Obtaining niche and credibility Opportunistic marketing Market penetration Responsive Marketing Develop the product market and create customer satisfaction Diversification Marketing New business development and managing the product life cycle Peace and Prosperity Through Science and Collaboration www.crdf.org 14

15. Marketing Planning Marketing Research Process of determining who the clients are, what they need or want, how they buy Sales Research Marketing Information System Compiles and organizes data relating to cost, revenue, and profit from the customer base Effects strategies and decisions Sales Forecasting Process of projecting future sales through historical data and statistical analysis Marketing Plans Five Areas Evaluation Peace and Prosperity Through Science and Collaboration www.crdf.org 15

16. Assessment and Evaluation of Entrepreneurial Opportunities Pitfalls in Selecting New Ventures Lack of objective evaluation No real insight into the market Inadequate understanding of technical requirements Poor financial understanding Lack of venture uniqueness Ignorance of legal issues Peace and Prosperity Through Science and Collaboration www.crdf.org 16

17. GLOBAL MARKETS Peace and Prosperity Through Science and Collaboration www.crdf.org 17

18. Global Marketing Objectives Exploiting market potential and growth Gaining scale and scope returns at home Learning from a leading market Pressuring competitors Diversifying markets Learning how to do business abroad Peace and Prosperity Through Science and Collaboration www.crdf.org 18

19. Driving Forces Affecting Global Marketing Driving Common Customer Needs (Market Needs and Wants) Technology Regional Economic Agreements Transportation and Communication Improvements Product Development Costs Quality World Economic Trends Transferable Marketing (Leverage) Global Channels Peace and Prosperity Through Science and Collaboration www.crdf.org 19

20. Restraining Forces Affecting Global Marketing Restraining Industry Factors Internal Resources Different Mixes Global Turmoil Management Myopia and Organizational Culture National Controls and Barriers Peace and Prosperity Through Science and Collaboration www.crdf.org 20

21. Global Opportunities for Entrepreneurs The International Environment Entering the International Marketplace Conduct research Prepare a feasibility study Secure adequate financing File proper documents Draw up and implement the plan Peace and Prosperity Through Science and Collaboration www.crdf.org 21

22. International Market-Entry Options Exporting Contracting Licensing Franchising Contract manufacturing Management contracts Strategic alliances Joint ventures Advantages Provide path of entry into many foreign markets May open new market opportunities May provide relationship establishment with foreign authority figures Peace and Prosperity Through Science and Collaboration www.crdf.org 22

23. Import Barriers Defined: Any obstacle making it difficult for a firm to enter a product market Classification of Barriers Tariff Barriers Non tariff Barriers slow customs bureaucratic inertia in processing import licenses Government regulations Manufacturing access (suppliers, distribution channels) Natural barriers Brand loyalty, promotional factors Advanced versus Developing Nations Exit Barriers Peace and Prosperity Through Science and Collaboration www.crdf.org 23

24. The Exporting Option Exporting option often is the most attractive mode of entry to the global marketing newcomer Indirect Exporting Hire a specialist to handle all of your export requirements Export Management Company (EMC) Direct Exporting Direct influence of the foreign marketing opportunity Learn how to operate abroad Develops a strategic involvement with the foreign market Avoid extra “agent” fees Direct Exporting Functions Review and Discuss the Functions listed in Exhibit 5.2 on page 136 Export Expansion Strategy Waterfall Strategy - an orderly expansion of exporting Sprinkler Strategy - quick penetration, preemptive first mover strategy Higher Risk - major commitments without the research and understanding of the market Peace and Prosperity Through Science and Collaboration www.crdf.org 24

25. INNOVATION ECO-SYSTEM Management & Commercialization Peace and Prosperity Through Science and Collaboration www.crdf.org 25

26. The Management of Technology Innovation Why do we innovate????? Patterns of strategic behavior Induced strategic behavior From the corporate perspective Major investment Autonomous strategic behavior Conceptually equivalent to entrepreneurial activity and introduces new categories of opportunity into the firm’s planning process Product championing and the informal network Product champion Organization member who creates, defines, or adopts an idea for an innovation and is willing to assume significant risk to make possible the successful implementation of the innovation Peace and Prosperity Through Science and Collaboration www.crdf.org 26

27. The Management of Innovation Igniting entrepreneurial spirit Market for ideas Pursuing fresh ideas (resource attraction) that will create new business opportunities Bringing in new voices into the opportunity seeking process, radically changing the believe that strategy is solely for senior managers Cross-functional barriers Turf – areas of expertise Interpretive – management opinions of tech project Communication – interdepartmental Peace and Prosperity Through Science and Collaboration www.crdf.org 27

28. Managing Technology Classifying development projects Derivative projects Centers on incremental enhancements Platform projects Design the design and components shared by a set of products Breakthrough projects New core products, processes and services Research and development Creation of knowledge that leads to new developments Peace and Prosperity Through Science and Collaboration www.crdf.org 28

29. New Product Development Process New product strategy Clearly defined strategy – particular product, market, and technology domains Anticipating competitive reactions Sources of Innovation (new product ideas) Lead users Small numbers of highly influential buying organizations who are consistent early adopters of new technologies Designed to unearth new product ideas and to identify a revolutionary approach to infection control Staying ahead of customers Proactively leading customers Peace and Prosperity Through Science and Collaboration www.crdf.org 29

30. Evolutionary Forces Shaping Technology Strategy How a firm’s technology strategy changes over time Technology Evolution S-curve trajectories Industry Context structure, regime, assets to commercialize, emergence of designs, adoption of technologies, industry standards, social aspects, competitive effects Organizational Context Ability to exploit opportunities Spontaneous and flexible response Ability to prioritize and balance challenges Peace and Prosperity Through Science and Collaboration www.crdf.org 30

31. Taking Technology (Innovation) to Market Corporate management of technology requires Careful planning of the relationships between Technologies (competencies) Markets Development Activities Levels of R&D depend on Available resources Competitive pressures Market requirements Process technologies - efficient product development Maximize R&D ROI Fullest market exploitation of the technology Technology - From idea stage to direct sells Peace and Prosperity Through Science and Collaboration www.crdf.org 31

32. The Technology Life Cycle (TLC) A firm needs to understand the TLC to get the most ROI on its technology Stage 1: Technology Development 3 reasons for development Obvious application Sufficient financial resources Projected ROI Other considerations Partnership? Sell the technology? Staff sophisticated enough to market the technology Peace and Prosperity Through Science and Collaboration www.crdf.org 32

33. The Technology Life Cycle (TLC) Stage 2: Technology Application Decision to continue to develop or sell the technology Cost and risk assessment Consider the potential returns from the technology as a whole - not just immediate sells Stage 3: Application Launch - “Performance Maximizing” Problems with licensing application of technology may not be refined sufficiently delayed due to long lead times ownership problems - “not developed here” problems associated with buyer and “changes” required Delay of launch may be an alternative Skim the market to recover costs Peace and Prosperity Through Science and Collaboration www.crdf.org 33

34. The Technology Life Cycle (TLC) Stage 4: Application Growth - “Sales Maximization” Market penetration considerations market size technology leadership Standardization Stage 5: Technology Maturity - “Cost Reduction Phase” Now in full competitive stage Production has leveled off for the originator Transfer to third world countries - turnkey deals Stage 6: Degraded Technology Reached a point of saturation and virtually universal exploitation License has expired Low commercial value Peace and Prosperity Through Science and Collaboration www.crdf.org 34

35. Some Final Thoughts on Managing Technology Innovation and Commercialization Strategy Market-Goal Orientation – Keep it real! Innovative companies consciously anchor their visions to the practical realities of the marketplace Know that you are Managing Chaos! Innovation is a process that is rarely planned and controlled Not analytical - intuitive, tumultuous process Innovation is probabilistic Possible Solution? Form small, flexible teams to enhance motivation, interactivity, and accelerate progress Use “determined champions” Peace and Prosperity Through Science and Collaboration www.crdf.org 35

36. SUMMARY POINTS DO YOU HAVE WHAT IT TAKES?? WHAT DO YOU HAVE TO OFFER THAT IS OF VALUE?? HAVE YOU DONE YOUR RESEARCH?? DO YOU HAVE A COMPLETE BUSINESS PLAN?? HAVE YOU GARNERED TEAM AND FINANCIAL SUPPORT?? ARE YOU A LUCKY PERSON?? Peace and Prosperity Through Science and Collaboration www.crdf.org 36

37. Q U E S T I O N S Michael Stankosky, DSc George Washington University (202) 994-7518 mstanko@gwu.edu www.gwu.edu/~iki Peace and Prosperity Through Science and Collaboration www.crdf.org 37